Property market down on 2007 stats

The residential and commercial property market has shrunk in the first half of the year compared with the same period in 2007.

A study by bank BNP Paribas found that investment in commercial real estate was down 50% on its 2007 figure.

It said this was due to increased interest rates and tougher conditions from lenders.

According to the Observatoire Credit Logement/CSA, which helps people get mortgages, the private mortgage market declined by 11%.

It said the value of private mortgages was down to 145.71 billion euros from 153.38 billion a year earlier.

The head of the Observatoire, Michel Mouillart, said that the picture was not as bad as first appeared adding that the average interest rate for mortgages was largely unchanged this year.

He said the problems stemmed from banks "refinancing their loan operations."

The US subprime crisis has made banks less willing to make loans among themselves, creating a credit squeeze with the knock-on effects being felt around the world.

Photo:Chris Naylor-Ballesteros